Small business owners need financial, operational and emotional support to succeed. Starting a business and navigating it in an often-harsh marketplace can be challenging. One of the most crucial support sources for entrepreneurs and small business owners is their social network. We’ll explore the role of friends and family in helping a new business succeed.
Friends and family provide a support system to help business owners manage stress, maintain perspective and improve work-life balance even amid the chaos and crushing responsibility of founding and running a business.
Aside from moral support, business owners often benefit from monetary contributions and investments from family and friends. Financial support can help entrepreneurs lay a firm business foundation or provide a lifeline amid financial hardship.
If you’re hiring and working with family, set clear boundaries, avoid favoritism, and communicate your expectations for your working relationship.
Family members and friends often provide business owners informal loans and financial gifts. In other cases, funding from family and friends can be more formal. Here are some funding options that family members and friends can use to support their loved ones.
Consider offering equity stakes to angel investors once your business is established and growing. For this reason, you might not want to divide all of your business’s equity among family and friends when you’re first starting your company.
Financial assistance, emotional support and companionship weave a web of connections that helps small businesses find stability. Bank of America’s Small Business Owner Report, based on a survey conducted between March and May 2022, includes responses from 1,037 small business owners across the country. Below are the report’s key findings about family and friend support.
Many businesses entrust family and friends with key organizational roles to ensure continuity if a founder dies or leaves the business.
The ties that bind us as family, friends and communities enrich our lives and strengthen our social bonds. They also throw a lifeline to small businesses working in the era of big-box stores and online marketing. Community ties and support among local businesses can help entrepreneurship thrive.
Whether you own a business or are planning to launch one, don’t be afraid to share your vision with family and friends. The people closest to you might be more than willing to support you and your professional venture. They also might take a few days out of the month to help you pack orders, update inventory notes or organize products.
Small businesses also need their communities’ input and support to thrive. Here are some ways to support local businesses you care about:
Be a good community steward of local businesses, and you’ll continue to access their diverse and unique products and services.
Adam Uzialko contributed to the reporting and writing in this article.